A story in The Observer yesterday said that News Corp is preparing a bid worth about $7bn for DirecTV, which is being sold by Hughes Electronics, part of General Motors, and an offer could be made as early as this week. However, analysts had expected that News Corp would only make a $5bn bid for a 20% stake in Hughes.
In Sydney today, where News Corp's has its primary listing, shares fell by 3.2% to close at A$10.92, after a day where the price fell to a low of A$10.93 and climbed as high as A$11.37. Some 14.8m shares were traded during the day.
Murdoch has long had his eye on the company, as buying it would fulfil his dream of owning a US satellite broadcaster and complete his international satellite network. Murdoch has major satellite television operations in Europe, with BSkyB, and Asia, with the Star network.
He came close to buying the network with an $18bn bid in October 2001. However, he was beaten to DirecTV at the 11th hour by smaller rival EchoStar.
EchoStar's deal with DirecTV fell through after a year of talks, after the company's bid became mired in regulatory problems from the US competition authorities.
If Murdoch's current bid was a success, he would share ownership of DirecTV with Liberty Media, the company chaired by John Malone. Liberty owns 18% of News Corp. Murdoch also faces competition from the telecoms company SBC, which is also interested in DirecTV.
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